Nicholas Melillo Veteran SEO Consultant and Web Designer

26Apr/11Off

Facebook Launches “Social Deals” to Directly Compete with LivingSocial and Groupon

Facebook Social Deals

Finally, after a long period of anticipation from the masses; Facebook has announced that they will be launching Social Deals to directly be competitive with Groupon and LivingSocial.

This is their second approach to this type of system and while it is a good idea, I personally think they are making some mistakes; which I will get into later.

The good thing is that they are integrating more geocentric functionality and the system will operate similar to Facebook Places only with coupons added into the mix.  They are trying to focus more on "social" (niche) type deals than more standard ones, to attractive a more selective audience.  This can be good and enable people to access unique discounts on events that normally would not be advertised in more traditional channels.

However, one major negative aspect about this system is that you must purchase vouchers online with real money or Facebook Credits and then redeem them offline.  In my professional opinion this is not a smart decision on Facebook's part.  Seriously, who wants to "buy" coupons?  Good luck with that Mark Zuckerberg...

You can subscribe to Facebook Deals directly through your user profile and get updates on deals near you, when they are published.  Right now, deals are only available in Atlanta, Austin, Dallas, San Diego and San Fransisco; so FB definitely has a long way to go before it EVER can be competitive with Groupon and LivingSocial.  But hey, its a start and you can't blame them for trying.

Eventually I think this can be a great system for the following reasons:

Like Before You Buy

Another thing to notice about the ACL deal is that there’s no associated discount, a hallmark of traditional daily deals: “50 to 90 percent off.” However this is precisely the type of offline social experience that Facebook is seeking to promote with the new program.

Another difference: you can Like deals without buying them — or before buying them. If you Like a deal it will be exposed through your feed.

You can also share and privately invite selected friends and ask them to join you or expose them to a deal. Facebook users can message each other and discuss the deal as a group before collectively buying. (Not all deals will be targeted toward groups.)

Like traditional daily deals Facebook Social Deals will come through email but also through the Facebook news feed. And they may potentially be exposed via Facebook Ads as well.

More Merchant Control, Including Caps

The notion here, as with Facebook check-ins, is that the new deals are supposed to be “social from the ground up.” Beyond the effort to to make them more social for consumers there are also important differences from conventional daily deals on the merchant side.

As mentioned Facebook Social Deals won’t always involve discounts. Merchants will also be permitted to set caps on how many deal vouchers can be purchased. This is typically not allowed on more traditional daily deal sites.

Another interesting angle is that merchants will be required to have Facebook Pages before they can participate. While many already do — 40 percent to as much as 60 percent-plus of SMBs have some sort of Facebook presence — this requirement creates a more structured way to capture and retain new customers.

Preventing the “One Night Stand”

Small businesses have sometimes struggled to translate daily deal buyers into repeat customers. By connecting deals and Facebook Pages, the company makes an effort to solve the problem of the “one night stand.”

With Facebook Social Deals local merchants can direct new customers to Like them on their Page and — voilà — they have a CRM platform. Merchants can then potentially start a “conversation” with these new customers.

While many SMBs set up a Page and then wonder “What now?,” Facebook’s Emily White says deal buyers (new customers) will help flesh out and populate content on SMB Facebook Pages. Indeed, this is the secondary mission of Social Deals — to get more SMBs to create and then really use Facebook Pages.

The new program will obviously compete with Groupon, LivingSocial and other deal sites, including the new Google Offers. While many who write about Social Deals will be tempted to use the headline “Facebook launches Groupon Killer,” there’s room for multiple winners in the deals space.

Read more about this topic at Search Engine Land

Personally, I am not going to start recommending this feature to my clients until it has proven its viability to exist, be competitive and most importantly...create profitable results that make sense for their businesses.

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